Many Policymakers Are Concerned That Americans Do Not Save Enough

Essay

Many policymakers are concerned that Americans do not save enough. Using the Solow growth model, with no technological change and no population growth, explain why:
a. for a given production function and depreciation rate, the saving rate determines the level of output per worker.
b. a higher saving rate will not necessarily generate more consumption per worker.
c. a higher saving rate will not produce a faster steady-state growth rate of output per worker.